NERC Slaps DisCo With N200m Fine for Overbilling Customers, Orders Immediate Refunds

• Nigeria's electricity industry regulator has slammed a huge fine on a DisCo for failure to comply with tariff regulation
• According to NERC, the AEDC effected a tariff increase which was supposed to apply to customers under Band A on Band B to E customers
• NERC fined AEDC the sum of N200 million and also ordered the immediate reimbursement of customers

Legit.ng journalist Victor Enengedi has over a decade's experience covering Energy, MSMEs, Technology and the stock market.

The Nigerian Electricity Regulatory Commission (NERC) has imposed a penalty of N200 million on Abuja Electricity Distribution Plc (AEDC) for disregarding its tariff regulations.

This sanction follows the Supplementary Order to the Multi-Year Tariff Order for 2024, issued on April 3, 2024, which highlighted AEDC's failure to comply.

It would be recalled that on April 3, NERC approved an increase in electricity tariff for Band A customers, stating that customers who receive 20 hours of electricity supply daily will pay N225 per kilowatt (kW) instead of the previous N66, starting from April 3.

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According to a detailed communication disclosed by NERC, it has been uncovered that AEDC incorrectly implemented an authorized tariff increase across all customer categories, disregarding the specific instruction that only customers in Band A were to be affected by the rate adjustment.

This error has resulted in unjustified charges for customers in Bands B to E and has raised concerns about the operational adherence and fairness standards upheld by one of the nation's prominent electricity distribution companies.

The supplementary order from the regulatory body initially aimed to revise tariffs in a manner that wouldn't unfairly burden the majority of electricity consumers, especially those outside of Band A.

In penalising the DisCo, NERC stated:

"AEDC has been fined N200,000,000 (Two Hundred Million Naira) for failure to comply with the prescribed customer band classifications for the tariff billing."

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AEDC to refund customers

As part of its corrective measures, NERC has instructed AEDC to compensate all impacted customers in Bands B, C, D, and E by issuing balance tokens corresponding to the correct tariff rates.

It stated:

"AEDC is therefore mandated to reimburse all customers in Bands B, C, D and E respectively that were billed above the allowed customer categories/tariff bands provided in the Order."

This remedial step is anticipated to be promptly implemented, offering relief to numerous consumers who were erroneously charged.

Furthermore, NERC's directive mandates AEDC to demonstrate proof of adherence to these corrective actions by April 12, 2024, highlighting the urgency with which the regulatory body aims to rectify the oversight.

Wale Ogundeji, an energy analyst, while speaking on the matter, commended the NERC for the sanction of the distribution company.

He told Legit.ng that the sanction shows that the NERC has the interest of the consumers in hand and is ready to protect them against unfair conditions.

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He said:

"Regulators in Nigerian have not done enough to protect Nigerian consumers, but I must say that as regards this issue, the NERC has done well to intervene.

"Penalising these service providers, whether in the electricity sector, telecoms sector, or wherever, would actually put them in check and ensure they do not take consumers for granted.

"This is indeed commendable and would serve as deterrence to others who overcharge consumers."

Minister tells DisCo to publish names of debtors

Legit.ng had previously reported that the Minister of Power, Adebayo Adelabu, had urged the Benin Electricity Distribution Company (BEDC) to publicly disclose the names of individuals or entities who owe the company debts.

This directive was issued during a meeting between the minister and the BEDC management while inspecting power projects in Benin, the state capital.

Adelabu stated that disclosing the names of the company's debtors is justified since electricity supply comes at a cost and is not provided for free.

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He emphasised the importance of revenue for BEDC to sustain its operations and adequately serve its customers.

Source: Legit.ng